April 01, 2010

Procurement Office Draws the Line on What Jobs Can Go to Contractors

What jobs should be performed by federal employees, and which are appropriate for government contractors?

The Office of Federal Procurement Policy yesterday published a proposal in the Federal Register that attempts to clarify just what constitutes an "inherently governmental function" that must be performed by a federal worker.

Under the Bush administration, the number of government jobs contracted out jumped sharply. Now, President Obama wants to cut government contract spending 7% by the end of FY 2011. One way to do this is by bringing more jobs back in-house.

The proposed policy letter, which is open for public comment until June 1, suggests defining an activity as inherently governmental “when it is intimately related to the public interest.”

OFPP proposed tests for agencies to help determine where to draw the line. These include a “nature of the function test,” which would “ask agencies to consider whether the direct exercise of sovereign power is involved.” If so, it’s a job for a federal employee.

The “discretion” test asks agencies “to evaluate whether the discretion associated with the function, when exercised by a contractor, would have the effect of committing the government to a course of action.”

Agencies were also warned that they have “both pre-award and post-award responsibilities for evaluating whether a function is inherently governmental.... for ongoing contracts, agencies should review how work is performed, focusing, in particular, on functions that are closely associated with inherently governmental activities.”

The United States spends about $530 billion a year on contracts.

Scott Amey, general counsel of the Project on Government Oversight, said in a statement, "I'm pleased to see that the White House has selected the legal definition of government work rather than the political definition. The proposed rule establishes a targeted approach that will better ensure companies with a financial interest are not driving federal policies and programs. However, enforcement of the rule will be difficult because contractors are often performing work that should be reserved for government employees."